Housing starts rise, but permits fall
U.S. housing starts rose 1.5% in October to a seasonally adjusted rate of 1.23 million, up from 1.21 million in September, the Commerce Department reported.
But single-family starts fell 1.8% to a rate of 865,000 from the revised September figure of 881,000. Also, total starts are 2.9% below the October 2017 rate 1.27 million.
Multifamily starts, including apartment buildings and condos, rose 10.3% to 363,000, however.
More troubling news is building permits fell 0.6% to 1.27 million from the October 2017 rate of 1.34 million. Single‐family permits in October were at a rate of 849,000, which is 0.6 percent% below the revised September figure of 854,000.
Multifamily permits dropped 0.5% to an annualized rate of 414,000.
Rising mortgage rates have been given much of the blame for the fall-off in starts as more potential home buyers stick to the sidelines. And the decline echoes the latest Builder Confidence report, which fell 8 points, released by the National Association of Home Builders.
Regionally, single-family starts fell 4% in the South and dropped 2% in the Midwest. In the Northeast, single-family starts jumped 14.8% but declined 2% in the West.
“This month’s decrease in single-family starts isn’t a surprise given the drop in our builder confidence index,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Builders are showing caution as mounting housing affordability concerns are forcing some consumers to delay making a home purchase.”
Regional numbers on a year-to-date basis show that combined single-family and multifamily housing starts rose 13.5% in the West and 5.5% in the South. Starts fell 0.6% in the Midwest and 4.8% in the Northeast.
“Single-family starts were strong at the beginning of the year, but weakened this summer and have remained soft,” said NAHB Chief Economist Robert Dietz. “Despite this softness, 2018 construction volume is set to be the best since the downturn. A growing economy and positive demographic tailwinds are supporting housing demand as interest rates rise. However, policymakers should take note of the November decline in builder confidence as a sign that housing affordability conditions will weigh on the housing market going forward.”
But single-family starts fell 1.8% to a rate of 865,000 from the revised September figure of 881,000. Also, total starts are 2.9% below the October 2017 rate 1.27 million.
Multifamily starts, including apartment buildings and condos, rose 10.3% to 363,000, however.
More troubling news is building permits fell 0.6% to 1.27 million from the October 2017 rate of 1.34 million. Single‐family permits in October were at a rate of 849,000, which is 0.6 percent% below the revised September figure of 854,000.
Multifamily permits dropped 0.5% to an annualized rate of 414,000.
Rising mortgage rates have been given much of the blame for the fall-off in starts as more potential home buyers stick to the sidelines. And the decline echoes the latest Builder Confidence report, which fell 8 points, released by the National Association of Home Builders.
Regionally, single-family starts fell 4% in the South and dropped 2% in the Midwest. In the Northeast, single-family starts jumped 14.8% but declined 2% in the West.
“This month’s decrease in single-family starts isn’t a surprise given the drop in our builder confidence index,” said NAHB Chairman Randy Noel, a custom home builder from LaPlace, La. “Builders are showing caution as mounting housing affordability concerns are forcing some consumers to delay making a home purchase.”
Regional numbers on a year-to-date basis show that combined single-family and multifamily housing starts rose 13.5% in the West and 5.5% in the South. Starts fell 0.6% in the Midwest and 4.8% in the Northeast.
“Single-family starts were strong at the beginning of the year, but weakened this summer and have remained soft,” said NAHB Chief Economist Robert Dietz. “Despite this softness, 2018 construction volume is set to be the best since the downturn. A growing economy and positive demographic tailwinds are supporting housing demand as interest rates rise. However, policymakers should take note of the November decline in builder confidence as a sign that housing affordability conditions will weigh on the housing market going forward.”